Revert to old ratio for crop insurance subsidy: CM

“The state is already reeling under severe financial crunch due to COVID pandemic and the onus of bearing a huge state share of premium subsidy under PMFBY is unaffordable. I, therefore, request you to take necessary action urgently to revert to 49:49:2 ratio premium share for the welfare of the farming community in the state,” said Stalin, in a DO letter.

The PMFBY is a government sponsored crop insurance scheme for the benefit of farmers and earlier, the share of subsidy was 49:49:2 (49 per cent by Centre, 49 per cent by the state governments and 2 per cent by the farmers), but the sharing per cent was changed in which the Central government imposed a cap of 25 per cent share for irrigated land and 30 per cent share for rain-fed land.

Stalin said that the capping of Central share of the premium subsidy has been a major detrimental factor for implementation of PMFBY as the state’s spending has increased dramatically.

“The state share of premium subsidy which was only Rs 566 crore in 2016-17 has increased by 239 per cent to Rs 1,918 crore during 2020-21. This has further increased to Rs 2,500 crore during 2021-22 due to exorbitant Actuarial Premium Rates (APR) quoted by the insurance companies,” said Stalin, who also added that the state is finding difficult to implement the scheme due the financial constraints.